introduce
#小韭社区 How many times has Bitcoin been declared dead? At least 463 times. This was never because its monetary system failed or its technical operations failed, but because its price plummeted.
Some may think that these two things - technical developments and price action - are intrinsically linked, but that is not the case.
#合约锦标赛 Bitcoin’s price fluctuations are mainly driven by its own halving cycle and macroeconomic events. Bitcoin has had a tumultuous history since it became a reality from its humble beginnings. Its notorious volatility has resulted in multiple appreciations of 1,000% in value, only to subsequently decline by 80% or even 90% - such as in 2014.
Each time, though, it rebounded, reclaiming its previous highs before setting new highs. That resilience has proven some of the most sophisticated investors wrong and won them new supporters.
In this article, we’ll take you through a detailed look at Bitcoin’s price history, year after year, surrounding the key events that shaped it into an innovative monetary system.
price history
The data sources chosen vary, especially in the first years.
Bitcoin was created in 2008 to challenge the existing centralized, credit-based currency system issued by bureaucrats and unstable banks. Bitcoin offers a way out of this disaster by trusting code rather than human weakness.
At first, this new invention was nothing more than an experiment, but those who have read the white paper and understand cryptography, currency, and finance can already see that it is turning into something much bigger than a simple crypto toy.
In its first year, Bitcoin had no market price; it had no premium and no investment from large venture capital firms. Something changed in 2010, when it started being traded for goods and services, which would set it on the path to the innovative and alternative currency system it is today – from $0 in 2009 to $68,000 in just 13 years.
Next, we’ll explore how Bitcoin grew from an ambitious tech toy into a real monetary asset and continues to deliver on its promise.
January 2009 to December 2013
Bitcoin's proof-of-concept white paper was published by Satoshi Nakamoto on October 31, 2008. Throughout 2009, anyone could join the network by mining Bitcoin with their computer's CPU without much effort. All things considered, the price is still $0.
2009: Genesis
Price range from $0 to $0.0009
Satoshi dug into the Genesis Block London Times' famous caption and headline which read "Chancellor on verge of second bank bailout" - an apparent reference to the 2008-2009 financial crisis.
The block reward is 50 Bitcoins, and people mine thousands of Bitcoins every day. The New Free Standard Exchange recorded the first Bitcoin-to-USD trade in late 2009, although people primarily traded Bitcoin through the BitcoinTalk forum.
The European sovereign debt crisis began in November, when Greece revealed its budget deficit was nearly double its previous estimates. While this event is too early in Bitcoin's history to affect the price in any meaningful way, indebted sovereign debt will continue to be a thorn in the side of traditional monetary systems that Bitcoin is compared to. issues that people worry about.
On October 12, 2009, a member of the BitcoinTalk forum exchanged 5,050 BTC for $5.02 via Paypal, which meant the price per coin was $0.00099, one of the lowest prices ever per BTC. The deal kicked off a series of off-market deals in the coming months.
2010: Bitcoin begins trading
Price range is $0.00099 to $0.4
On February 20, a person took to reddit using a username that they claimed was selling 160 BTC for $0.003, which would be the lowest price ever.
On May 22, Laszlo Hanyecz bought two pizzas for 10,000 Bitcoins, marking the iconic first exchange of Bitcoin for a real-world product; Bitcoin Pizza Day was born.
Mt. Gox, the first large-scale Bitcoin exchange, debuted on July 18.
The most significant vulnerability in the history of the Bitcoin network was exploited in August this year, when an attacker managed to spend billions of Bitcoins they did not own. The vulnerability was discovered and fixed within hours, forcing miners to fork the network and release a new, updated version of the Bitcoin protocol that did not include malicious transactions.
2011: Dollar Parity
Price range is $0.4 to $4.7
In February of this year, Bitcoin became parity with the U.S. dollar for the first time, a milestone. On April 26, 2011, Satoshi Nakamoto sent his last email to other developers, stating that he had "moved to other projects" - and was never heard from again.
Bitcoin payment processor Bitcoin Pay was founded in May and allows companies to accept Bitcoin as a form of payment. By June, the price of one Bitcoin had reached $30, but slowly fell back to the $2-4 range, where it remained for the rest of the year.
Nonprofits such as the Electronic Frontier Foundation and WikiLeaks began accepting Bitcoin donations, with the latter switching to Bitcoin after PayPal froze WikiLeaks' account in December 2010.
In June 2011, Mt. Gox experienced its first hacker attack. Hackers successfully entered the company's auditor's computer and changed the price of Bitcoin to 1 cent.
2012: European debt crisis
Price range: $4-$13.50
The start of 2012 is still marked by the European sovereign debt crisis, with some member states becoming highly dependent on the European Central Bank and the International Monetary Fund to repay their debts. Cyprus has been particularly hard hit, with incremental demand for Bitcoin coming from the financial crisis in Cyprus, the worst-affected region.
Bitcoin Base was founded in June 2012 to offer a new way to buy and sell cryptocurrencies.
On August 9, a Mt. Gox glitch caused Bitcoin to be priced at $100 per coin on exchanges. Eleven days later, on August 20, the stock price fell by 50% from $15.28 to $7.60 due to suspicious news that the Bitcoin Savings and Trust Fund plan offering a 7% weekly interest rate was closed. The fund’s operator, Trenton Shavers, later became sentenced in the first Bitcoin securities fraud case.
Bitcoin spent the rest of the year consolidating, and by November it was gone through the first halving. The year-end price was $13.50.
2013: The Plunder of the Silk Road
Price range: $13-$755
Bitcoin experienced its first post-halving bull run. The price started this year at just over $13, and within a month it had risen to $26. The rally continued in April and quickly rose to $268 before plunging 80% to $51 between the 10th and 13th of the same month.
In June, Gox Mountain stopped processing U.S. withdrawals and by July, the price had fallen back to $68.50. It continued to trade for just over $100. Silk Road was seized by the FBI in October.
On August 12, German regulators officially announced Bitcoin as a unit of account.
By December, it had surged to an all-time high of $1,163, gaining 840% in 8 weeks, before falling back to $687 a few days later. In December, the People's Bank of China (PBOC) banned the use of Bitcoin by Chinese financial institutions, causing the price of Bitcoin to drop to just over $700. This won’t be the last time China “bans” Bitcoin.
January 2014 to December 2017
This period was marked by the emergence of alternative coins and the massive infusion of capital into the cryptocurrency market, which was an integral part of 2017’s ICO mania.
Bitcoin went from just over $800 in 2014 to trading at nearly $20,000 in 2017.
Along with the big money came greater attention from the media and financial institutions, and governments began to look more closely at Bitcoin and its phenomenon—sometimes putting pressure on the market through strict regulations, especially in China.
2014: MT.GOX was hacked
Price range: $767-$321
In 2014, Bitcoin was notoriously volatile. At the beginning of the year, the price climbed back above $1,000, but by the end of February, the price had fallen back below $600 and plummeted to $111 (down 90% from the high of $1,000!) due to the troubles in Ge Keshan. —The hack involved approximately 750,000 Bitcoin user funds. After the incident, the exchange had to file for bankruptcy.
PBOC instructed domestic banks to close accounts of Chinese Bitcoin exchanges by April 15.
Bitcoin recovered throughout the remainder of the tumultuous year, only to plummet shortly thereafter, ending 2014 at just over $300.
In December, the first Bitcoin hard fork, Bitcoin XT, was released by Mike Hearn, who aimed to increase the maximum number of transactions per second from 7 to 24. This growth means that the block size must be expanded from 1mb to 8mb.
2015: The start of the block size wars
Price range: $314-$431
On January 4, Bitstamp suffered a serious security breach, losing approximately 19,000 BTC, and its market value at the time was approximately $5.1 million.
Bitcoin started the new year at $314, remaining relatively calm compared to 2014 with little volatility and more consolidation. Ethereum launched on July 30, and its platform has sparked the creation of thousands of new cryptocurrencies that are eager to compete with Bitcoin in the coming years.
On June 22, 2015, Gavin Anderson published "BIP 101" which requires increasing the block size. The block size wars continued in August with Gavin Anderson and Mike Hearn proposing to increase the block size limit to 20 MB.
In September, the U.S. Commodity Futures Trading Commission (CFTC) defined Bitcoin as a commodity. In contrast, the European Union decided in October not to impose VAT on crypto transactions. This effectively defines Bitcoin as a currency.
2016: Prices recover
Price range: $434-$966
The second Bitcoin halving occurred on July 9, and Bitcoin prices were relatively stable throughout the year, trading between $350 and $700 during the summer months, only touching $966 at the end of the year.
2016 was marked by the hack of Bitcoin exchange Bitfinex which resulted in nearly 120,000 BTC being stolen from users.
2017: Crypto and ICO fever
Price range: $998 to $14,245
Like 2013, 2017 was a historic year for Bitcoin. At the beginning of this year, the price hovered around $1,000, broke through $2,000 in mid-May, and soared to $19,892 on December 15, a 20-fold increase in less than 12 months.
The chart above refers to Bitcoin’s dominance in the cryptocurrency market. Bitcoin's dominance declined dramatically as thousands of new cryptocurrencies were created, and the ICO craze exploded, with investor money and gambling money diverted from Bitcoin into the alternative Bitcoin market.
The ICO boom marked the arrival of venture capital firms and thousands of crypto projects began to receive funding, turning the crypto market into a casino of sorts. By the way, misinformation and FUD surrounding Bitcoin increased at this time.
On August 2, Bitfinex, a major Bitcoin exchange, was hacked, and nearly 120,000 BTC (approximately $60 million at the time) were stolen by hackers. Bitcoin prices immediately plunged 14% to $214 in just 30 minutes before rebounding the same day - a classic flash crash.
In August, the Bitcoin network implemented a major upgrade - Seg Wit, which alleviated Bitcoin's scalability issues to a certain extent and enabled the Lightning Network.
After breaking above $5,000 in early September, the price fell to around $3,600 on news that China was wanted in a crackdown on Bitcoin and cryptocurrencies. By October, the cryptocurrency had recovered to $5,000 and the next epic surge of $20,000 awaited.
Bitcoin futures contracts were first launched in December last year and are traded on the Chicago Mercantile Exchange (CME).
2017 was the year that everyone took notice of Bitcoin, from institutional and retail investors to governments and economists. They have all started their own battles for or against Bitcoin.
To be continued...$BTC